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Amazon Web Services is developing a hardware-based cloud storage appliance for enterprises that prefer to use a mix of private and public cloud infrastructure, CRN has learned.

The AWS cloud storage appliance, which already is being tested by some customers, effectively acts as a bridge between an enterprise's private cloud and the AWS public cloud. It lets enterprises keep sensitive data on-premise and use the AWS cloud for file sharing, backup and disaster recovery, sources familiar with the Seattle-based vendor's plans told CRN.

Amazon isn't manufacturing the cloud storage appliance itself and is instead working with a third-party white-box vendor, sources said. It's unclear how AWS will go to market with the cloud storage appliance.

An Amazon spokesperson declined comment, citing the vendor's policy of not responding to "rumors or speculation."

The sources said this is the next step in a hybrid cloud strategy that began last January when Amazon unveiled its AWS Storage Gateway, a virtual machine image that runs in VMware ESX and Microsoft Hyper-V environments. Amazon added a gateway-cached storage volume feature last November and started positioning AWS Storage Gateway as an alternative to local storage arrays for storing customers' primary data.

The AWS cloud storage appliance uses a similar approach to startups such as Nasuni, TwinStrata and Panzura, which sell on-premise hardware that ties into AWS and other cloud storage services. But unlike these offerings, the AWS storage appliance will only work with the AWS cloud, sources told CRN.

"This is Amazon extending the reach and purpose of already a robust cloud offering," one source with knowledge of Amazon's plans told CRN. "The appliance is a means to an end to ensure that customers have different paths to the same destination, which is cloud adoption."

The idea behind the AWS cloud storage appliance is to let enterprises tap into the cost efficiencies of its public cloud while keeping their sensitive data on-premise. This is a notable shift, as AWS executives have long preached that public cloud is capable of handling anything enterprises need to do, and that private clouds are unnecessary.

"Over time, we think very few companies are going to own their own data centers, and ones that do will have a small footprint," Andy Jassy, senior vice president, Amazon Web Services and Amazon Infrastructure, said in a keynote at the AWS re:Invent conference in mid-November.

Even after beating out IBM for a $600 million cloud computing contract for the Central Intelligence Agency, AWS executives avoided using the term "private cloud" to describe the project. But in an interview with "60 Minutes" that aired Sunday night, Amazon CEO Jeff Bezos confirmed that AWS is indeed building a private cloud for the CIA.

"We're building what's called a private cloud for them ... because they don't want to be on the public cloud," Bezos told CBS News correspondent Charlie Rose, according to the interview transcript.

CRN's 2018 MSP 500
With the fast-growing -- and fast-changing -- MSP landscape in mind, CRN has again assembled the MSP 500, an annual list that recognizes North American solution providers with cutting-edge approaches to managed services.